Credicorp

Flat rate

A flat rate is a way of charging interest on the original amount borrowed for the whole term, rather than on the balance that actually remains outstanding as it is repaid. Because the charge is calculated on the full sum throughout — even as the borrower pays it down — a flat rate produces a higher true cost than the same headline percentage charged on a reducing balance.

What it charges on: The original amount borrowed, for the full term.
Why it can mislead: It looks smaller than the equivalent reducing-balance rate.
Fairer comparison: APR, which annualises the true cost including the effect of repayments.

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Flat rate versus reducing balance

On a reducing-balance basis, interest is charged only on what is still owed, so the charge falls as the balance is repaid. On a flat-rate basis, the charge stays based on the original amount throughout, so a borrower who is steadily repaying still pays interest as if the full sum were outstanding. The same headline number therefore costs more on a flat rate than on a reducing balance.

Interest Interest is the charge a lender makes for the use of borrowed money, usually expressed as a rate. On short-term business lending interest is often charged… APR What is APR in the UK? Annual percentage rate expresses the yearly cost of borrowing as a single percentage, combining the interest rate with any… Cost of credit The cost of credit is the total a borrower pays on top of the amount borrowed — interest plus any fees. It is the most honest figure for judging how much… Representative example A representative example illustrates the typical cost of a facility using a worked set of figures — amount, rate, fees and total repayable — so a borrower… /legal/vulnerability/ How Credicorp, a UK business lender, supports customers going through a difficult time — vulnerability policy and support routes. Due diligence Due diligence is the set of checks a lender carries out before and during a lending relationship — confirming the borrower is genuine, understanding its… Covenant A covenant is a promise or condition in a loan agreement that the borrower must keep. Breaching a covenant can be an event of default, even if payments… Sanctions Sanctions are legal restrictions that prohibit dealing with certain named individuals, entities or regimes. Lenders screen borrowers against sanctions… Limited liability Limited liability means the owners of a company or LLP are not personally responsible for its debts beyond what they have agreed to contribute — their… Exempt lending Exempt lending is credit that falls outside the UK consumer-credit regime. Lending to a body corporate — a limited company or LLP — is exempt under FSMA… Companies House Companies House is the UK's registrar of companies. It incorporates and dissolves limited companies and LLPs, and maintains the public register of company…

Why APR is the fairer comparison

Because a flat rate can look smaller than its true cost, comparing facilities on APR — which annualises the real cost and takes the repayment schedule into account — is the more reliable approach. Reading the flat rate alongside the total amount repayable and the APR is the honest way to judge what a facility actually costs.

Flat rate and Credicorp

Credicorp charges interest on the outstanding balance on its short-term business lending, so settling early reduces the cost — the transparent alternative to a flat rate. The exact daily rate, fee and total-cost cap are published in the machine-readable references at /ai.md and /llms-full.txt. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

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